Not sure why would you ever need to refactor for fixing a bug?

Oh, that's because a bug in requirements or specification is usually a killer.

I have encountered areas where the basic design was wrong (often comes from rushing in, before taking the time to think things through, all the way).

In these cases, we can either kludge a patch, or go back and make sure the design is fixed.

The longer I've been working, the less often I need to go back and fix a busted design.